In this article, we discuss 5 Artificial Intelligence Stocks in Cathie Wood’s Portfolio. If you want to read our detailed analysis of Wood’s hedge fund and recent developments, go directly to read 10 Artificial Intelligence Stocks in Cathie Wood’s Portfolio.
5. Twilio Inc. (NYSE:TWLO)
Number of Hedge Fund Holders: 96
Twilio Inc. (NYSE:TWLO) is an American cloud communications platform that uses AI algorithms to recommend relevant information and responses.
ARK Investment Management started building its position in Twilio Inc. (NYSE:TWLO) during the fourth quarter of 2016. In Q3 2021, the hedge fund held a $1.03 billion worth of stake in the company, which accounted for 2.48% of its 13F portfolio. Recently, Twilio Inc. (NYSE:TWLO) launched a $50 million investment fund that would pursue different organizations to explore new avenues of customer engagement. On December 9, Barclays upgraded Twilio Inc. (NYSE:TWLO) to Overweight, while maintaining a $375 price target, which implies a 35% upside.
At the end of Q3 2021, 96 hedge funds tracked by Insider Monkey held stakes in Twilio Inc. (NYSE:TWLO), compared with 98 in the previous quarter. The total value of these stakes is over $6.36 billion. Besides ARK Investment, SCGE Management was one of the company’s leading shareholders in Q3, holding roughly 2.8 million shares.
RiverPark Funds mentioned Twilio Inc. (NYSE:TWLO) in its Q3 2021 investor letter. Here is what the firm has to say:
“TWLO shares were also a top detractor for the quarter. Just like after 1Q, despite another quarterly beat in 2Q, management guidance–which we believe to be conservative–disappointed some investors. Second quarter revenue of $669 million was up 67% year over year, significantly exceeding management’s guidance of 47%-50% revenue growth. Management guided 3Q21 revenue to 50%-52% revenue growth, which was ahead of expectations, but due to continued investment also guided to a non-GAAP operating loss of $25 million-$30 million, which was below the Street’s forecast of a $12 million loss.
The COVID crisis has accelerated the adoption of the company’s cloud-based, integrated communications platform that allows companies in a wide range of businesses to embed digital communications capabilities (video, chat, voice, SMS, fax, and email) into their customer facing applications without needing to build back-end infrastructure and interfaces. Twilio’s total addressable market is now greater than $40 billion, which should grow by 50% over the next few years, providing a strong secular tailwind for the company. We expect the company’s gross margin to continue to expand from 54% in the second quarter toward management’s long-term goal of 60%-65%, and, as the company grows to scale, we expect its non-GAAP operating margin to expand to 25%.”
4. Spotify Technology S.A. (NYSE:SPOT)
Number of Hedge Fund Holders: 48
Spotify Technology S.A. (NYSE:SPOT) is a Swedish advertisement streaming and media services provider whose primary AI algorithm recommends new music through a process called collaborative filtering. As streaming already represents 83% of the recorded music sales in the U.S., Benchmark initiated its coverage on Spotify Technology S.A. (NYSE:SPOT) with a Buy rating and a $300 price target.
According to Insider Monkey’s data for Q3, 48 hedge funds tracked by Insider Monkey reported owning stakes in Spotify Technology S.A. (NYSE:SPOT), the same as in the previous quarter. These stakes hold a consolidated value of over $3.03 billion.
ARK Investment Management holds 4.6 million shares in Spotify Technology S.A. (NYSE:SPOT) in Q3, valued at over $1 billion. The company accounted for 2.49% of Cathie Wood’s portfolio. In Q3, the company reported solid growth of 75% in its advertisement revenue at 323 million euros.
Baron Funds mentioned Spotify Technology S.A. (NYSE:SPOT) in its Q3 2021 investor letter. Here is what the firm has to say:
“Spotify Technology S.A. is a leading digital music service available in 178 international markets, offering on-demand audio streaming through paid premium subscriptions as well as a free ad-supported model. Shares were down as engagement declined while economies reopened and pandemic restrictions were lifted. We continue to view Spotify as a long-term winner in music streaming with potential to go from 158 million paying subscribers today to over 250 million in four years, driven by its scalable core music product as well as its growing library of spoken word content.”
3. Shopify Inc. (NYSE:SHOP)
A Canadian multinational e-commerce company, Shopify Inc. (NYSE:SHOP) utilizes store AI analytics that provides insights into customers’ activities while optimizing opportunities in one place. ARK Investment Management made its first investment of $242,000 in the company during the second quarter of 2017. In Q3 2021, the hedge fund held $1.25 billion worth of shares in Shopify Inc. (NYSE:SHOP), which accounted for 3% of its 13F portfolio.
On November 30, Shopify Inc. (NYSE:SHOP) reported record merchant sales of $6.3 billion globally, driven by Black Friday consumer spending. The sales experienced a 23% growth from the same period last year. As of the close of December 10, Shopify Inc. (NYSE:SHOP)’s year-to-date returns came in at 33.8%, while the stock surged 37.99% in the past year. As the company’s payment business grew by 46% year-over-year, Oppenheimer reiterated its Buy rating on Shopify Inc. (NYSE:SHOP), with a $1,700 price target.
As per Insider Monkey’s Q3 data, 73 hedge funds tracked by Insider Monkey reported owning stakes in Shopify Inc. (NYSE:SHOP), down from 85 in the previous quarter. The consolidated value of these stakes is over $11.4 billion. Lone Pine Capital held a roughly $2 billion worth of stake in Ottawa-based company, becoming its largest stakeholder in Q3.
ClearBridge Investments mentioned Shopify Inc. (NYSE:SHOP) in its Q2 2021 investor letter. Here is what they said:
“Shopify (is one of the) companies that have become go-to platforms for small and medium size businesses (SMBs) engaged in e-commerce and social media marketing, rebounded strongly in the quarter after being caught in the selloff among high-multiple growth names since Vaccine Monday. These and the portfolio’s other disruptors had thrived through the first part of the pandemic, leading us to trim positions into strength and reallocate cash into more attractively priced evolving opportunities and steady compounders that had been overly punished by lockdowns and a drop in economic activity.”
2. UiPath Inc. (NYSE:PATH)
Number of Hedge Fund Holders: 27
UiPath Inc. (NYSE:PATH), an American software company, has built AI into every part of the UiPath platform to discover automation opportunities.
In its recently announced Q3 earnings, UiPath Inc. (NYSE:PATH) posted an EPS of $0.00, beating the estimates by $0.04. Moreover, the company reported a 58% year-over-year growth in its annualized renewal run-rate (ARR) at $818.4 million. Citing the company’s solid growth potential, recently, Truist set a $75 price target on UiPath Inc. (NYSE:PATH), while keeping a Buy rating on the shares.
ARK Investment Management remained bullish on UiPath Inc. (NYSE:PATH) in Q3, as the hedge fund increased its stake in the company by 102%, which accounted for 3.02% of its 13F portfolio.
Apart from Cathie Wood’s hedge fund, Alkeon Capital Management was one of the prominent stakeholders of UiPath Inc. (NYSE:PATH) in Q3, holding over 12.5 million shares. Overall, the number of hedge funds tracked by Insider Monkey having stakes in UiPath Inc. (NYSE:PATH) decreased to 27, from 46 in the previous quarter. However, the total value of these stakes stood at $3.62 billion in Q3, up from $3.45 billion in the preceding quarter.
ClearBridge Investments released its Q2 2021 investor letter and mentioned UiPath Inc. (NYSE: PATH) in it. Here is what the firm has to say:
“We participated in the IPO of UiPath, a developer of software for robotic process automation that uses AI, natural language processing and design to streamline complex processes across a variety of technology environments. The company is an industry leader with a superior solution for leveraging software to optimize workloads. Organizations around the world are beginning to understand the power of automation, with momentum picking up toward fully automating business processes, a $60 billion market today that could grow to $200 billion or more by 2030. UiPath has a unique pricing model, broad partner ecosystem and thoughtful management team supporting one of the strongest growth profiles in technology. Risks we are watching include a partial cloud transition ahead and increased competition from larger software platforms over time.”
1. Teladoc Health, Inc. (NYSE:TDOC)
Number of Hedge Fund Holders: 40
Teladoc Health, Inc. (NYSE:TDOC) is a multinational telemedicine company that also offers AI and analytics platform services. Recently, Baird showed confidence in the healthcare tech and sees upside potential in Teladoc Health, Inc. (NYSE:TDOC), mainly due to the new Omicron Covid-19 variant. The firm set a $110 price target on the stock while maintaining a Neutral rating on the shares.
As of Q3, Teladoc Health, Inc. (NYSE:TDOC) was the second-largest holding of ARK Investment Management. Currently, the hedge fund holds roughly 16.5 million shares in the company, valued at $2.08 billion. Teladoc Health, Inc. (NYSE:TDOC) represented 5.01% of Cathie Wood’s portfolio. In Q3, the company reported revenue of $521.6 million, up 80.6% from the prior-year quarter.
Of the 867 hedge funds tracked by Insider Monkey, 40 hedge funds held stakes in Teladoc Health, Inc. (NYSE:TDOC), compared with 43 in the previous quarter. These stakes have a total value of over $2.8 billion.
Luca Capital mentioned Teladoc Health, Inc. (NYSE:TDOC) in its Q3 2021 investor letter. Here is what the firm has to say:
“As bullish as we are on the future of telemedicine though, we acquiesce that it can be difficult to build a durable moat. Although telemedicine is very scalable and an easy sell (everyone is a potential customer), the service itself is a commodity with little pricing power and low switching costs. However, scale is a significant advantage as a larger network of providers confers lower connection times and wider coverage. In addition, different areas of the country have varying access to care at any given time, but since regulations now allow providers to see patients across all states, we can better match doctors with patients under a national network, similar to “load balancing” in computing. Since Teladoc is international too, there also exists an opportunity to see patients across international borders. These are just a handful of reasons why we do not believe off-the-shelf consumer products like Zoom or Twilio will eventually replace the core telemedicine providers. They’re not integrated, not on-demand, limited to local physician supply, not accessible at the point-of-care via carts or other hospital equipment, and there’s nothing like Livongo to give the providers a continuous picture of patient health. Teladoc also allows whitelabelling, which enables health systems to take advantage of Teladoc’s additional provider supply while retaining the brand their patients have come to know and trust. However, while this incentivizes health systems to go with specialized platforms like Teladoc or Amwell, it’s making it more difficult for end-consumers to differentiate the major telemedicine providers at the product-level.”
You can also take a look at 10 Best Stocks Under $10 in Cathie Wood’s Portfolio and Cathie Wood Stock Portfolio: 10 Newest Stock Picks This Year
